Issues and Analysis: Ford Post-Nasser

In a short 18 months, external perceptions of the Ford Motor Company have changed so drastically that one can hardly say that it is the same company.

In a short 18 months, external perceptions of the Ford Motor Company have changed so drastically that one can hardly say that it is the same company. That will be the subject of great historical debate in the industry that was partly invented by this company more than 100 years ago. The subject of what to do next will be no less debated. Ford’s current state of affairs began before Jacques Nasser took the helm and will likely be difficult to redirect now that he’s gone. Now ex-Ford chief Alexander Trotman and his team devised a plan to propel Ford past GM in market share called “Ford 2000,” which hardly anyone remembers today. But the matrix structure of this reorganization was significant as a precedent for the type of changes that are likely to work next.

But first things first. Once there is a plan, structure will follow, not the other way around, like last time. Nasser’s early days were successful because they were marked by one key characteristic: they set priorities for the rest of leadership in the company. His Friday emails to the company managers and staff which highlighted the activities of the week at the top pulled the company together in a way that it had not been done before. But the amount of change engendered by this era in Ford history was small by comparison to what had occurred earlier and what is likely to occur now. The reason is simple. To paraphrase one of BMW’s key managers during the development of the current 3-series project, “It is hard to change a company that is not on its knees.” In other words, if you are at the top of your game, it is difficult to justify major changes. A good company will respond to crisis with changes needed to put it back on track. A great company anticipates the need for change before it is required.

As Bill Ford, Jr., steers the company back to basics, what will the successful scenario look like? Leverage your strengths would be a good first candidate and learn from the past. Ford is the world’s leading truck manufacturer. The F-series story could become the best internal case history for the company to focus on at this hour of need because it illustrates, simultaneously, Ford at its best and Ford in need of improvement. The current model of the F-series began with a skunk works market research effort by one key insider and one consultant, who were ultimately ignored by the company bathed in the success of the F-150 after its launch. This is no way to boost morale in any organization. And morale has suffered at Ford for a long time

For years, middle managers at Ford have been asking, “Faster, better, cheaper—which is number 2?” As the ranks shrank at Ford and fewer people did more work—often with little direction from the top—many middle managers stepped up. And they will again. But to waste their efforts now would be tragic.

With the unchallenged success of the financial side of Ford’s business during the last decade, it seemed easy to forget what business the company was in. Ford quality was never equal to Honda or Toyota. The history of problem launches at Ford goes back much farther than just the current problems with the Thunderbird (e.g., the old Taurus). It has taken so long for this car to come to market that it has become a symbol of what is wrong at Ford. In the end, only product matters. Concentrate on product and the rest will follow. Ford needs to go back to what made the company a contender for the world’s largest and most profitable car company. Start with the F-150 and make this flagship product the symbol of Ford’s remaking in this decade. Bill Ford’s championship for the environment can be incorporated into this product plan. Internal platforms can propel a company to great successes and they have the wonderful property of capturing the imagination of both the buying public and all company employees—not just a few engineers with better ideas. That is how to leverage a strong corporate culture, and that is what Ford and many other companies need to do today. Zero percent financing won’t do the trick. Great products and zero defects will.